* 100 lawsuits filed after FDA said oral phenylephrine no

better than a placebo

* Appeals court says federal law preempted most state-law

claims

* Lawyer for consumers says litigation far from over

By Jonathan Stempel

NEW YORK, July 30 (Reuters) - A federal appeals court on

Thursday revived portions of nationwide litigation in which

consumers accused drugmakers such as Procter & Gamble ( PG ) and

retailers such as CVS of selling billions of dollars of

over-the-counter decongestants that didn't work.

The litigation comprised about 100 lawsuits filed after a

U.S. Food and Drug Administration advisory panel found in

September 2023 that oral phenylephrine, an ingredient in such

products as Vicks NyQuil Severe Cold & Flu and Advil Sinus

Congestion & Pain, was no better than a placebo.

A three-judge panel of the 2nd U.S. Circuit Court of Appeals

in Manhattan said the Federal Food, Drug and Cosmetic Act

preempted most of the consumers' state law-based claims, saying

the defendants followed FDA labeling requirements.

But the court revived claims over decongestants labeled

"maximum strength," because various defendants added that phrase

on their own. It also revived claims over brand-name drugs

approved through the federal New Drug Application process,

because the defendants could have updated labels to reflect the

latest science.

"The limitations on consumer plaintiffs' state law remedies

may appear unfair, particularly when the FDA's own agency review

has confirmed that oral PE does not work as a decongestant and

when studies have impugned oral PE's efficacy for 20 years,"

Circuit Judge Denny Chin wrote. "The fix, however, must flow not

from litigation but from the FDA."

LITIGATION 'FAR FROM OVER'

Thursday's decision also said consumers lacked standing to

pursue a civil racketeering claim accusing the defendants of

defrauding the public and the FDA.

Jonathan Selbin, a lawyer for the consumers, said they were

"obviously disappointed" with parts of the decision and

reviewing their next steps.

"For over a decade these manufacturers made billions of

dollars selling products with a decongestant that they long knew

- in many cases based on their own studies - was entirely

ineffective at decongesting," he said. "This case is far from

over."

Procter & Gamble ( PG ) makes Vicks NyQuil Severe Cold & Flu, while

Haleon ( HLN ) makes Advil Sinus Congestion & Pain. Some of the

other defendants included Bayer, GSK, Kenvue ( KVUE )

, Costco, Target ( TGT ), Walgreens and Walmart ( WMT )

, as well as CVS.

Lawyers for those companies did not immediately respond to

requests for comment.

The appeals court returned the litigation to U.S. District

Judge Brian Cogan in Brooklyn, who dismissed it in October 2024.

In November 2024, the FDA proposed removing oral phenylephrine

as an ingredient in over-the-counter oral cold medications.